Dahler v Australian Capital Territory (No 2)

Dahler v Australian Capital Territory (No 2) concerned an unsuccessful application for leave to appeal from interlocutory decisions of the Federal Circuit Court, with the issue of whether the application was made vexatiously and/or without reasonable cause. The Court was also required to determine whether a costs order could be made against the applicant’s lawyer, and whether reasonable cause existed to believe that additional costs had been incurred due to the lawyer’s misconduct as defined in r 40.07 of the Federal Court Rules 2011. The Court found that the applicant’s counsel, Ms Judith Keys, was personally liable to pay the costs that Mr Dahler would otherwise be liable to pay to the respondents.

The Court noted that, while Mr Dahler had not applied for an order under r 40.07, r 1.40 of the Federal Court Rules allows the Court to exercise any power mentioned in the Rules on its own initiative. Additionally, r 1.32 enables the Court to make any order it considers appropriate in the interests of justice. Therefore, the Court has the power to order that a lawyer pay costs a party would otherwise be liable to pay. The Court found no reason why it should not be exercised in this case.

The Court concluded that the application for leave to appeal was brought without reasonable cause, and ordered that the costs that Mr Dahler would be liable to pay the respondents be paid by his counsel, Ms Keys. The Court's decision highlights the potential for lawyers to be held personally liable for costs in certain circumstances, and underscores the importance of ensuring that applications for leave to appeal are made with reasonable cause.